Buying your first home can feel a bit daunting, but with the right savings plan in place, you might be holding the keys to your dream home sooner than you think.
Get the full picture
Firstly, what can you afford? You will want to start here and work backwards. Start with a basic budgeting exercise to determine exactly how much you are spending each month in comparison to your earnings. This will help you identify areas where you may be able to make cutbacks. Our Budget Planner is a great tool to help make this step a bit easier.
Once you know how much money you have left after paying all your expenses, you can determine what you will realistically be able to afford in monthly mortgage payments. Try our Borrowing Power calculator to see what’s possible.
Determine what you need for a deposit
Now that you have worked out the total amount you can comfortably borrow, it’s time to determine exactly what you need to save for your deposit. Most lenders require a 20 percent deposit to avoid lenders mortgage insurance (LMI); however, if you’re close to your 20 percent deposit and have found your dream home, you will have to weigh up the cost of adding lenders mortgage insurance or missing out on that home.
Don’t forget to budget and save for stamp duty, which varies between states but works out to be approximately 5 percent of the total purchase price. Use our Stamp Duty calculator to estimate the cost.
Need a little extra help?
Explore the options available to help first home buyers:
The First Home Loan Deposit Scheme
The First Home Loan Deposit Scheme* is an Australian Government initiative providing a guarantee that will allow eligible first home buyers to purchase a home with a deposit of as little as 5 percent, without the need for lenders mortgage insurance. G&C Mutual Bank is one of the Participant Lenders in this scheme.
The First Home Owner Grant
The First Home Owner Grant is a government scheme providing a one-off payment for eligible first home buyers who purchase or build a residential property to live in.
Stamp duty concessions
Stamp duty is a tax levied by state or territory governments on certain purchases, including buying a home, land, or investment property. Depending on your state or territory, you may be eligible for concessions as a first home buyer.
The First Home Super Saver Scheme
The First Home Super Saver Scheme allows you to save money for your first home using your superannuation fund. This scheme, run by the Australian Taxation Office (ATO), helps first home buyers save faster by allowing them to withdraw voluntary super contributions that they have made to their super.
A family guarantor loan
Our Get Ahead Start option allows a family member to use some of the equity in their own home to guarantee part of your home loan. Borrow up to 100 percent of the purchase price of the property, plus additional associated costs.
Let the saving begin
Now that you have your end goal in mind, it’s time to start saving! Here are a few things to consider to get you there faster:
- Move back in with your parents: it’s not for everyone, but if you have the option you will be able to pocket the amount that you would be paying in rent each week.
- Open a bonus interest savings account: these types of accounts allow you to earn more interest than a typical everyday account and some of them even offer bonus interest for every month that you haven’t made a withdrawal. Explore our range of savings accounts.
- Put your savings on autopilot: make sure you prioritise saving by automatically transferring money into your savings account when you get paid.
- Consider your investment options: you may want to consider investing in shares or a managed fund to boost your savings power if you are still a year or more away from reaching your savings goal.
- Take out a term deposit: if you’re looking for a low risk investment, term deposits are a great alternative to shares as they offer a set return.
Accomplishing your goal
Once you have worked out what you can afford, how much money you will need for a deposit and any extra costs such as stamp duty and legal fees, you will have a much clearer goal in mind. So, go ahead and give it a try – the sooner you begin your savings plan, the sooner you will be planning for your first house-warming party!
Whether you’re saving for a deposit, looking for pre-approval, or need support on your home ownership journey, we’re ready to help you.
Any advice or information provided on this site is general advice only, and does not take into account your personal objectives, financial situation or needs. Before acting on any general advice you should consider its appropriateness given your personal circumstances. You should consider the Terms and Conditions for a product before acting on any advice to acquire it. Please consult with a financial adviser for personal financial advice.
*Subject to eligibility criteria available from NHFIC website. NHFIC will provide a guarantee to a participating lender for part of an eligible first home buyer’s home loan. Limited places available.
